1.4 In February 2011, the Treasury's Infrastructure UK team, working with the Cabinet Office's Efficiency and Reform Group, launched a pilot review to assess potential for securing savings on operational PFI projects. The pilot looked at three Ministry of Defence projects and one Department of Health project. It was part of a wider review of public sector contracts arising from Sir Philip Green's efficiency review.4
1.5 The pilot exercise concluded that significant savings were possible, and a commitment was made in July 2011 to secure at least £1.5 billion worth of savings from operational PFI contracts5. No timeframe was set for the achievement of these savings. The three main areas of savings identified were:
a. effective management of contracts, for example by reducing wasteful energy consumption, or ensuring that alongside the contractor the public authority takes a share of cost reductions (e.g. lower insurance premiums);
b. making efficient use of space, for example by subletting or mothballing surplus building space;
c. reviewing soft service requirements, to ensure the public authority does not buy more than it needs (e.g. frequency of window cleaning and redecoration).
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4 Efficiency Review by Sir Philip Green, 11 October 2010. www.gov.uk/government/uploads/system/uploads/attachment_data/file/61014/sirphilipgreenreview.pdf
5 Speech by the Commercial Secretary to the Treasury, Lord Sassoon, to the UKTI & Canadian Council for Public-Private Partnerships Roundtable on Exporting Public-Private Partnerships Expertise to Global Markets, 20 September 2011.